As Democrats struggle to agree on Joe Biden’s enormous $3.5 trillion budget reconciliation spending bill, they are finding some common ground on a pervasive new tax that will “pay for” the trillions they are sure to begin soon spending.
Unrealized capital gains are the newest target for their insatiable appetite for the property earned by ordinary Americans. Of course, the talking point used to sell the tax as a “painless” way to extract revenue from the economy is that it only targets the wealthiest Americans.
Unrealized capital gains are increased in the market values of stocks and other assets that have not been “realized” as defined by the federal tax code. Ordinarily, gains are not realized until an asset has been sold and the seller receives sale proceeds.
These gains are increases in property value like stocks and real estate that the owner has yet to “realize” by selling the property for more than was paid for it.
Speaker Nancy Pelosi told CNN on Sunday that the bill “probably will have a wealth tax.”
Joe Biden’s Secretary of the Treasure Janet Yellen also told the network that the tax is under discussion. Yellen did not refer to it as a “wealth tax” but said it would attach to the estimated or “on paper” increase in the value of billionaires’ assets and property that would otherwise be subject to a capital gains tax when sold.
.@SecYellen on the proposed tax which would pay for the Build Back Better act: "It's not a wealth tax, but a tax on unrealized capital gains of exceptionally wealthy individuals." pic.twitter.com/7JXAysPkxI
— The Hill (@thehill) October 24, 2021
Despite its impact on capital assets, Yellen said she “wouldn’t call that a wealth tax.” She said that the tax would “get at” assets that currently “escape taxation” until they are sold.
Sen. Ron Wyden (D-OR), Chairman of the Senate Finance Committee, is reportedly drafting the new tax provisions, likely to be released this week. The tax would reportedly be imposed first on persons with property worth more than $1 billion or who have earned over $100 million in income for three consecutive years.
On his Fox News show on Sunday, Sen. Tim Scott (R-SC) told Mark Levin that the Democratic strategy is to tax revenue “not in your account yet.” Scott added that such taxation “discourages the system itself” and said the Biden administration is “antithetical” to American free enterprise.